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'Stupid' to keep sick pay rule: Christian Democrats

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23 February 2013

15:37 CET+01:00

The Swedish government is split over whether to reform a rule requiring businesses to cover the first two weeks of sick leave pay for employees.

The Centre Party and the Christian Democrats are pushing to scrap the second sick week pay obligation for employers, which would mean that the state would step in to cover a worker's benefits already after the first week of sick leave.

The Liberal Party (Folkpartiet) is hesitant about changing the rules and the Moderate Party wants an inquiry before taking any decisions.

Christian Democrat Mats Odell, the former financial markets minister and current chairman of the Riksdag's Committee on Finance (Näringsutskottet) said it would be "stupid" not to change the rules.

Referring to a study by the Swedish Federation of Business Owners (Företagarna), Odell told Sveriges Radio (SR) that the reform could help generate jobs.

"Between 25,000 and 55,000 job opportunities have been missed because of the rules that are in place today," Odell claimed.

But the Liberal Party's finance policy spokesman, Carl B. Hamilton, was not convinced.

"It is very important for employers to have a clear motive, an incentive, for handling health issues in the workplace," said Hamilton.

Social Democrat leader Stefan Löfven has said that it would cost the Swedish state around 1.5 billion kronor ($233 million) per year to take over responsibility for covering the second sick week pay.

Odell put the figure at 1.3 billion kronor and said the reform must be implemented as soon as possible.

"We have formulated a proposal which is entirely feasible. Youth unemployment is such a scourge that we can't wait indefinitely to take concrete measures," said Odell.

Elisabeth Thand Ringqvist, CEO of the Swedish Federation of Business Owners, said she believes a change is imminent.

"The reason why so many parties are shifting on this issue is because it is something that businesses often bring up. The sick pay obligation is causing a lot of trouble for them," said Thand Ringqvist.

According to the Federation of Business Owners, the sick pay obligation rules have not had any effect on sick leave rates since they were introduced in 1992.

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At the time, the general payroll tax was lowered as a compensation for employers but Thand Ringqvist said that raising that tax is out of the question.

She also admitted that scrapping the sick pay obligation is not a guarantee for creating more jobs.